Stocks opened higher on Thursday and the bears did not put up much of a fight all day. The Dow never traded in negative territory and every dip was eventually bought with the indices closing near the highs of the day. The Dow gained 110-points.
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The I-fund led the way with a 1.4% gain, but I was surprised it was not higher since the EAFE was up 1.37% and I thought it was due some payback from Wednesday's price. Perhaps today?
The S-fund gained over 1% and the F-fund was up modestly.
Oil was up 3.6% Thursday and moved back above $50 a barrel and it seems stocks are most happy when oil is above $50 a barrel. Where the high end of that comfortable level is, we don't know yet, but I assume consumers would like it to stay below $60 to keep gasoline down in the $2.00 a gallon range.
The SPY (S&P 500 / C-fund) gained nearly 1% on Thursday and the breakout from the wedge (red) has been very successful so far. But now it has run into the December highs and we may have a double top on our hands. Double tops are not bearish per se, but they can trigger some profit taking in the short-term so it will be interesting to see if stocks can breakout without taking a little pause first.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 (S-fund) did breakout to new highs after flirting with a breakout for over a week. That early February stall leading up to Thursday's breakout in the $EWM is what I am talking about in the SPY chart regarding possible profit taking before a breakout happens.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Wilshire 4500 did it, and now the Semiconductor Index, one of the leading technology indices, is another "major" index to show a breakout above the inverted head and shoulder pattern that we have seen on so many charts over the last few months. If these breakouts hold, the upside potential is very good.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The Nasdaq 100 (QQQ) also broke out to a new high on Thursday and that's a good sign as we'd need to see technology on board if this rally is going to continue. Having the semiconductors and the QQQ on board is a plus, but there is a small open gap below and it may not be a straight ride higher from here. Gaps tend to get filled. All prior gaps, except for that pesky open gap down by 94 (purple) have been filled on this chart, and now we see one at 105 that may get filled in the coming days, which could jeopardize the breakout.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
Oil moved back above the $50 mark yesterday after dipping below it on Wednesday. It will be interesting to see if the breakouts in stocks stall if oil cannot maintain the $50 level.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The EFA (EAFE Index / I-fund) broke out of bull flag #2 on Thursday, and it closed above the 200-day EMA again. This is looking pretty good, but let's hope it sees the 3 to 5 day confirmation above that EMA.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
The AGG (Bonds / F-fund) was up slightly and trying to bounce off of the 50-day EMA. It's too early to say this is a bear flag, so the early speculation is that bonds could get a little relief rally here.
Chart provided courtesy of www.stockcharts.com, analysis by TSP Talk
From www.tsp.gov: "Some financial markets will be closed on Monday, February 16th in observance of the Presidents' Day holiday. The Thrift Savings Plan will also be closed. Transactions that would have been processed Monday night (February 16th) will be processed Tuesday night (February 17th), at Tuesday's closing share prices."
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Thanks for reading! Have a great holiday weekend!
Tom Crowley
Posted daily at www.tsptalk.com/comments.php
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